Global Brands Group slashes losses thanks to restructuring efforts
today Nov 16, 2019
Hong Kong-based apparel, footwear and brand management company Global Brands Group Holding Limited announced on Thursday that it has made significant progress in reducing its net loss as it continues to push forward with aggressive restructuring.
Global Brands Group’s net loss for the six months ended September 30, 2019, was $90 million, a significant improvement from the loss of $284 million reported by the company in the same period in the previous year.
This growth in the first half of the fiscal year was achieved despite a 5.2% decline in revenues, which fell from $676 million in the prior-year period to $641 million.
According to the group – which owns brands including Frye, Spyder and Aquatalia – this decrease was related to the businesses that it divested last year, when the company sloughed off a significant portion of its operations in North America as part of its restructuring efforts.
However, these efforts also drove a solid improvement in Global Brands Group’s total margin, which increased 600 basis points, from 27.2% to 33.4% as a percentage of revenue, as well as a reduction in the company’s operating costs, which fell to $262 million, down 20.7% from $331 million in the prior-year period.
Thanks to these improvements, the company’s EBITDA also returned to positive figures during the first half of the fiscal year, increasing 304.4% to $80 million.
“A year ago, we announced aggressive targets to reduce operating costs and a clear action plan to improve the total margin,” explained Global Brands Group CEO Rick Darling in a release. “Our team has worked diligently to achieve these goals and drive forward the group’s transformation, resulting in real progress with respect to our targets and margin.”
“Our performance during the first half of the fiscal year 2020 has improved significantly compared to last year and puts us on a path to sustainable growth,” he added.
Global Brands Group further clarified that, as its restructuring efforts are on track, the company is expected to complete the program by the end of fiscal 2020.
It hasn’t all been smooth sailing, though, and Darling highlighted the uncertainty generated by the ongoing U.S.-China trade war and the as-yet unresolved issue of Brexit, as continuing sources of instability in the U.S. and Europe, respectively.
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